Crocs, Inc. reported first-quarter revenues jumped 23.7% to $166.9 million compared to revenue of $134.9 million in the year ago period. First quarter 2010 net income was $5.7 million, or 7 cents a share, against a loss of $22.4 million, or 27 cents, a year ago.
Year-over-year first quarter changes in the company's channel revenue streams were as follows:
- Wholesale sales increased 26.1% to $120.2 million;
- Retail sales increased 23.3% to $34.4 million; and
- Internet sales increased 5.1% to $12.3 million.
Changes in the company's regional revenue streams during the same quarterly periods were as follows:
- Europe increased 34.3% to $38.0 million;
- Asia increased 40.3% to $54.7 million; and
- Americas increased 9.8% to $74.2 million.
Balance Sheet
The company's cash and cash equivalents as of March 31, 2010 increased to $53.8 million compared to $50.9 million at March 31, 2009. The Company had no bank debt at March 31, 2010.
Inventory decreased to $107.2 million at March 31, 2010 from $131.2 million at March 31, 2009, resulting in inventory turnover of 3.2 times in the current quarter.
The company ended the first quarter of 2010 with accounts receivable of $97.4 million compared to $60.6 million at March 31, 2009. Days sales outstanding increased from 40.4 days for the three months ended March 31, 2009 to 52.5 days for the three months ended March 31, 2010.
“Our return to first quarter profitability underscores the resiliency of Crocs as a brand and as a company,” commented John McCarvel, president and chief executive officer. “Revenues improved across all channels and across each region this quarter driven by strong customer reception to our products. We also turned a critical corner in our wholesale channel this quarter, where revenues were up in all regions for the first time in more than a year. Margins also improved as we benefitted from our cost-savings initiatives undertaken in 2009. Our strategy to return to profitable growth in 2010 has not changed and this positive start to the year positions us well to execute against that plan.”
Guidance
The company expects to generate between $210 million and $220 million in revenue during its 2010 second quarter. This represents projected growth of between 20% and 26% over the non-GAAP revenue of $174.0 million reported in the second quarter of 2009, which excludes $23.7 million in previously-impaired sales the company has stated would be non-recurring.
The company expects second quarter 2010 diluted earnings per share to be between $0.18 and $0.22. This guidance assumes an effective tax rate of 30%.
CROCS, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||
(In thousands, except share and per share data) | |||||||||
(Unaudited) | |||||||||
Three Months Ended
March 31, |
|||||||||
2010 | 2009 | ||||||||
Revenues | $ | 166,852 | $ | 134,892 | |||||
Cost of sales | 80,148 | 85,161 | |||||||
Gross profit | 86,704 | 49,731 | |||||||
Selling, general and administrative expenses | 74,778 | 68,740 | |||||||
Foreign currency translation losses (gains), net | (292 | ) | 3,408 | ||||||
Restructuring charges | 2,539 | 38 | |||||||
Impairment charges | 141 | 69 | |||||||
Charitable contributions expense | 143 | 39 | |||||||
Income (loss) from operations | 9,395 | (22,563 | ) | ||||||
Interest expense | 129 | 696 | |||||||
Gain on charitable contributions | (84 | ) | – | ||||||
Other (income) expense | 241 | (1,052 | ) | ||||||
Income (loss) before income taxes | 9,109 | (22,207 | ) | ||||||
Income tax (benefit) expense | 3,392 | 210 | |||||||
Net income (loss) | $ | 5,717 | $ | (22,417 | ) | ||||
Net income (loss) per common share: | |||||||||
Basic | $ | 0.07 | ($0.27 | ) | |||||
Diluted | $ | 0.07 | ($0.27 | ) | |||||
Weighted average common shares outstanding: | |||||||||
Basic | 84,485,728 | 84,392,620 | |||||||
Diluted | 87,218,802 | 84,392,620 |